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Article by, Lee Marple, Gerald Eve
As we approach almost a year of homeworking, the figures from the January 2021 Economics Report from PwC show that the population of London is set to drop for the first time since 1988. Enforced remote working has offered flexibility to the capital’s workforce, with many continuing to operate effectively from across the country, or even across the world. While there is little doubt that an office of some description is an integral asset for businesses, a hybrid approach to working looks set to stay. Therefore, this shift in our attitude to location-based working poses interesting and challenging questions for business leaders looking forward.
So, where will businesses operate in a post-pandemic world? Current industry trends have indicated that occupiers are reluctant to make office relocation decisions until an increased level of business confidence and economic stability is evident. Equally, landlords are happy to comply with tenants staying put for the time being, with many accepting lease extensions in the short term. However, when the time is right to move, what factors will businesses consider when approaching their future relocation strategy?
Historically, the location of a company’s real estate was defined by either the need to be close to clients, or close to the source of materials for processes such as manufacturing. This has changed in recent years as employers have moved their places of work to be near to the best talent. For example, we’ve witnessed the move of technology companies such as Amazon and Salesforce to Shoreditch. Relocating near to the ‘Silicon Roundabout’ in East London, reflected a move to be near to one of the capital’s most rapidly expanding hubs of technological enterprise with huge access to a skilled and mobile local workforce.
It’s true that job prospects in the capital offer a wealth of opportunity, but working in a city like London is an attraction for talent beyond the nine to five. Working in any city centre, not only offers convenience, but also allows workers to step out of the office and straight into a vibrant social scene. The after-work dinners and drinks with friends may seem like a distant memory at the moment, but these will return, and then proximity to social hubs will continue to be a key attraction for talent acquisition and retention.
The pandemic has resulted in many people reassessing their priorities, so metropolitan areas will need to reinvent themselves to attract workers to return, as society places a bigger emphasis on the importance of community. We’ve seen suburban areas thrive as a result of homeworking. Without a daily commute, a community of all ages and occupations has supported independent shops on the doorstep of the home creating capsules of activity as we support our hyper-local economy. Now, businesses are starting to explore the hub-and-spoke model.
In principle, the hub-and-spoke model appeals to companies who recruit nationally, with a central headquarters ‘hub’ and further ‘spoke’ locations in other areas. In particular, this may appeal to businesses who want to access and support a network of employees or fulfil different company functions. The result would be pockets of bustling activity across the country, rather than a densely populated epicentre with empty suburbs that we experienced prior to the pandemic.
As the green agenda continues to be embraced by corporates following progressive environmental, social and corporate governance or ESG policies, environmental concerns are more than ever starting to influence relocation decisions. Sustainability is no longer an after-thought in the boardrooms of corporates across the country.
Occupiers will look for buildings that have the highest sustainability credentials possible and more progressive developers and landlords such as British Land are not only developing buildings with BREEAM ‘Outstanding’ ratings but also starting to work with their occupiers to implement sustainable policies within buildings and estates to their mutual benefit.
The best solution to create an environmentally friendly and sustainable workplace can often lie within the building itself. Taking an existing building back to its concrete frame and then refurbishing with new cladding is an effective way to take steps towards creating a net carbon neutral environment. In the same way, landlords will look to offer environmentally sound workspaces, that will attract tenants with strong sustainability values and credentials.
Carbon emissions from traffic and vehicles have dropped in the last 12 months without the need for commuting and, going forward, relocation decisions may consider how businesses can offer the most effective transport links to the workforce. As sustainability looks set to become one of the biggest priorities facing the next generation, it’s important to capitalise on the progress that has been made and also to offer a better quality commute for individuals.
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